mining sector

South Africa

The changes to the South African mining code have been in the works for some time. With indications being the government will move to increase taxes on miners, and introduce higher thresholds for black ownership and representation in management.

And this week was supposed to be when it all came down.

Mines minister Mosebenzi Zwane previously said he expected to introduce the mining charter amendments by the end of March. With the new rules to be published in the official government gazette.

It was expected that Minister Zwane would consult with the South Africa Chamber of Mines prior to the release — in order to brief mining companies on details of the new legislation.

But reports yesterday suggest that hasn’t happened. With officials from the Chamber of Mines saying they haven’t been apprised of the changes — and that no further meetings with the government are scheduled this week.

That means one of two things. Either the government is planing to delay on the release of the amendments, or officials are going to go ahead with the changes without giving industry the chance to comment.

The outcome here is a critical one. If the government indeed goes ahead without consultation, it would be a major slap in the face to miners — likely to further inflame negative sentiment in the sector.

On the other hand, if the government is delaying the release, it could signal that authorities are considering last-minute changes to the rules. Perhaps giving concessions in the face of objections from mining companies.

We’ll know one way or another by the end of Friday. Watch for a release — or lack thereof — from the government.